Apple said undercover calls made by Australia’s consumer watchdog cannot be considered as breaches because consumer law does not exist in ‘hypothetical circumstances’.
Photograph: Joel Carrett/AAP

Australia’s consumer watchdog carried out a sting operation against Apple which it says caught staff repeatedly misleading iPhone customers about their legal rights to a free repair or replacement after a so-called “error 53” malfunction, court documents reveal.

Australian authorities lodged a high-profile case against Apple this year, after iPhone and iPad customers experienced a malfunction that rendered phones useless if it detects that a repair has been carried out by a non-Apple technician. The fault occurred between late 2014 until early last year.

The case, set to go to trial in mid-December, accuses Apple of wrongly telling customers they were not entitled to free replacements or repair if they had taken their devices to an unauthorised third-party repairer.

What is 'error 53'?

'Error 53' is a message that occurred after updating to iOS 9.0 on iPhones of people who had had their TouchID fingerprint sensor replaced by a repair shop not licensed by Apple.

The phones were rendered useless because the operating system update detected a mismatch between the sensor and the phone, and locked the device, assuming unauthorised access was being attempted.

The documents also show how the ACCC used undercover methods to investigate Apple. Investigators, posing as iPhone customers, called all 13 Apple retailers across Australia in June last year.

They told Apple staff their iPhone speakers had stopped working after screens were replaced by a third party.

Apple’s response was the same in each of the 13 calls, the ACCC alleges.

“In each call, Apple Australia represented to the ACCC caller that no Apple entity ... was required to, or would, remedy the defective speaker at no cost under the [Australian consumer law] if the screen of the iPhone had been replaced by someone other than Apple Australia or an Apple-authorised service provider,” the ACCC’s court claim alleged.

Error 53 generally occurred after a user tried to update their phone to iOS 8 or iOS 9, and affected about one in every 1,000 phones supplied by Apple or its resellers between September 2014 and February 2016.

Australian consumer law clearly protects the right of a customer to a replacement or free repair if the product is faulty or of unacceptable quality.

The ACCC has also alleged information on Apple US’s website misled customers about their rights. The website told users experiencing error 53 that: “If the screen or any other part on your iPhone or iPad was replaced somewhere else, contact Apple Support about pricing information for out-of-warranty repairs.”

Apple, in response, said the undercover calls made by the ACCC cannot be considered as breaches because consumer law does not exist in “hypothetical circumstances”.

Apple says iPhone 'Error 53' is to protect customers' security

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The company said that real customers who had called the store would have received other information from Apple that informed them of their rights under consumer law.

Apple denied the message on its US website was an “express representation” that consumers were not entitled to a free replacement or repair.

Apple said the website was referring only to the conditions of the company’s own limited warranty, which existed in addition to a customer’s statutory rights.

It was only one part of the communications between the company and its customers over error 53, the company said, and must be interpreted in the broader context.

Apple said it had also established an error 53 outreach program and offered replacements or repairs for many of the phones referred to in the ACCC’s case. It also released an update in February last year to resolve the problem and restore the functionality of affected devices.